Unit 03: Strategic Change Management

INTERNATIONAL COLLEGE OF BUSINESS AND TECHNOLOGY

PROFESSIONAL DIPLOMA IN STRATEGIC MANAGEMENT & LEADERSHIP (Edexcel BTEC Level 7)

ASSIGNMENT COVER SHEET 2013/2014 

Task 01

Write a report not more than 3500 words covering the criteria given below by analyzing a strategic change you think your organization should implement.  The strategic change can be either a change within a department, SBU or an entire organization.

1. Discuss different models of strategic change available for an organization and critically analyze them to identify the most appropriate model for the above change considering the current business context (Need to analyse at least 03 models highlighting the differences and similarities)

(LO 1.1 / LO 1.2)

2. Critically discuss the importance of making the above change, asses the factors that are driving the change and asses the resource implications which make the organization not respond to change

(LO 2.1 / LO 2.2 / LO 2.3)

3. Assess the value of using strategic intervention techniques in organisations

(LO 1.3)

4. Develop a change management strategy which will involve stakeholders for the above change, develop systems to involve stakeholders in the planning of change and critically evaluate the systems used to involve stakeholders in the planning of change

(LO 3.1 / LO 3.2 / LO 3.3)

5. Create a strategy for managing resistance to change

(LO 3.4)

6. Develop appropriate models for change, plan to implement a model for change and develop appropriate measures to monitor progress

(LO 4.1 / LO 4.2 / LO 4.3)

Introduction

The company which has been selected for this assignment is Hayleys Advantis Limited. Hayleys Advantis Limited is a leading logistics service provider in Sri Lanka with connections to the international logistics, freight forwarding and shipping lines. The service provided from Hayleys Advantis Limited includes integrated logistics services which includes inland transportation of goods, energy support services, other transportation services, international freight management services which includes moving goods through shipping lines and airline transportations, marine services that include container vessels management, and harbour terminal services. The vision of Hayleys Advantis Limited is ‘To be Sri Lanka’s logistics inspiration’. The assignment will discuss on the theoretical and practical aspects of managing organisational change in Hayleys Advantis Limited.

1. Different models of strategic change available for an organization and critically analyse them to identify the most appropriate model

Among many theoretical models of change that can be applied to make changes in the Hayleys Advantis Limited organisation, the 8 steps to change by Kotter, Three stages change management model by Kurt Lewis and ADKAR model can be identified as three main models that can be used for managing changes in Hayleys Advantis Limited organisation. The change that has been proposed for the organisation is to change the current ERP system new an updated ERP system where the employees will be provided with new user interfaces to manage their work in offices. Employees who are providing their contribution as manual labour will not have a higher impact from the change as the change will focus on people who are using the computerised ERP system (Hayleys Advantis, 2015).

8 steps to change by Kotter model has steps that have its first three steps which focus on freezing the organisation, second three steps to make the changes happen and then the final step for refreezing the organisation. In the first step, urgency for change is increased. In that people are inspired and motivated support the change by showing the benefits they will receive from changing to the new ERP system. The second step is building the guiding teams where properly qualified employees at the position those will be impacted by the changes. This will include aligning the operational teams and other support teams of the Hayleys Advantis Limited. Third step is creating the vision for the change. In the case of Hayleys Advantis Limited, the vision will be change the ERP system for receiving better operational outcomes and make the business process smoother. Then the fourth step is communicating the vision to the organisation. Fifth step of the model is empowering action. Empowering action includes removing the obstacles for the change and recognises progress. This step will include providing training and basic demonstrations of the new ERP system. 6^th step is creating short term wins. This will be achieving the systems implementation steps (Kotter¸ 2006). Not letting go and make the changes reinforce are the next two steps. In those two, the system will be monitored and support will be provided (Senior and Fleming, 2005).

Kurt Lewis has introduced the model with three steps, unfreeze, change and refreeze. In unfreeze, the change will be thoroughly investigated and understood. The actions that were carried out in the first three steps of Kotter’s model will be performed in the unfreeze phase. The second phase is change phase, in that switching to the new ERP system will be done and the employees will be using the new system instead of the old one. Then the refreeze will be done where stability of the new system will be increased and people will get comfortable with their routine.

The ADKAR model is another change model that can be used to manage change which has a different step of steps than the previous two. In ADKAR model, five activities are carried out. Those include,

1.      Awareness – increasing awareness about the new system and its benefits

2.      Desire – motivating the employees to reach for the changes which will benefits them and make their work easier

3.      Knowledge – providing product knowledge for the employees in the new ERP system

4.      Ability – providing practical training for the employees for the employees of Hayleys Advantis Limited to use the new ERP software that are relevant to them

5.      Reinforcement – making sure that the employees are taking the best use of the systems

When the models are compared, it can be seen that Kotter’s model of change and Kurt Lewis model has similarities of the process even though the steps taken are slightly different. But the ADKAR model has provided a clear and better understanding model which can easily be implemented. As the five phases of the ADKAR model also match the type of the change that needs to be implemented in Hayleys Advantis Limited (Wren, 2008). Therefore a decision can be made to use the ADKAR model as the change model for Hayleys Advantis Limited.

2. Discuss the importance of making the above change, asses the factors that are driving the change and asses the resource implications which make the organization not respond to change

Importance of making the above change

The change that has been proposed includes giving new ERP software systems for the employees of the organisation which are relevant for them to manage their work. This will include updated logistics management systems, management information systems, human resource information systems, and customer relationship management systems etc. using of the systems for the change will have several advantages for the Hayleys Advantis Limited organisation.

The ERP systems will give complete visibility in to all parts of the business such as Human resource management, logistics management, purchasing management, operations management and all other business functions of the Hayleys Advantis Limited so that the management will be able to easily monitor the changes and analyse the business requirements. It will help to build more coordination and coherent workflow in the organisation. The ERP systems will be connected to each other and therefore the systems will allow building relationships between the business units of the organisation so that mistakes that happen due to lack of coordination will be reduced (French and Bell, 2001).

Management Information reports can be easily created with the ERP systems and therefore the management of Hayleys Advantis Limited will be able to keep track of the business performance easily and in a convenient way.

Business decision making will be made easier by the ERP systems as they are able to track down the current business flow and forecast the future of the business flow. That information can be used by the management to support the business decisions so that the business can be developed.

The factors that are driving the change

Increasing demand – as one of the popular and highly reputed logistics service provider in the country, the Hayleys Advantis Limited keeps developing the demand for services day by day. Therefore the management and the directors of the organisation have understood that more efficient systems and developed working systems are needed for the employees perform better and match the supply of service to the demand they have. And it also includes developing the business with help of more human workforce.

Performance development – using new ERP systems that are updated with the newest technologies and the more efficient techniques have been proven to increase the organisational performance. As a service provisioning organisation, Hayleys Advantis Limited has a higher requirement of efficient work as efficiency is a key quality in logistics service. Need of more efficiency can also be identified as a driving force for a new ERP system.

Need of higher revenue – higher revenue generation is also a strategic goal of Hayleys Advantis Limited as an organisation. It includes generating more sales, generating more income and finally developing the business as a whole unit. As the ERP systems have the ability of performing these activities directly and indirectly, the organisation has identified the change as an essential factor.

Resource implications which make the organization not respond to change

Human resources – lack of expert and highly skilled human resources is one of the resource implications that have made the Hayleys Advantis Limited reluctant for the change. The employees those working in the departments have been using the old ERP systems for a long time and they have become very familiar with those systems. And the employees do not have hands on experience with the new or complex ERP software package. Due to lack of skilled employees, the Hayleys Advantis Limited has shown low responses for the change.

Physical resources – there are hardware and other physical resources that are also need to have when the new ERP system is implemented in the Hayleys Advantis Limited. This will include new computer systems that are capable of installing the advanced ERP system. Therefore the old computer hardware will not support the new change.

Financial resources – having to purchase new hardware systems, provide training for the employees and also purchase of the ERP software will incur expenses that are out of the normal budget for the year. Therefore the lack of financial resources will also be another factor for the organisation show low responses for the change.

3. The value of using strategic intervention techniques in organisations

Use of the strategic intervention techniques for managing the change process of the Hayleys Advantis Limited can have several benefits and advantages for the organisation itself and for the employees who are working in the organisation.

Team building consensus and conflict – getting the consent of all the employees that are working in the team of the Hayleys Advantis Limited organisation and getting consent for the change from all the employees who will be affected from the change will be one of the intervention techniques that can help the changes be more effective. As the change actions have been taken with the consent of the employees, they will be working towards applying the changes to the system on their own.

Contingency theory – use of the contingency theory in the Hayleys Advantis Limited will allow the management of the Hayleys Advantis Limited to use different management styles and strategies to match the background of the business problem throughout the change process (Kotter¸ 2006). This will allow making flexible and more effective decisions throughout the change management process.

Taking proactive actions – taking proactive actions in the organisations such as providing training for the employees the systems are set up, purchasing the hardware requirements beforehand in order to avoid waiting time for processing will be some of the proactive actions that can be taken by the Hayleys Advantis Limited organisation. These will reduce the processing time in the change management process it will allow the organisation to make the process faster and more convenient for the employees and also to achieve a higher productivity level at the same time.

4. Develop a change management strategy which will involve stakeholders for the above change, develop systems to involve stakeholders in the planning of change and critically evaluate the systems used to involve stakeholders in the planning of change

Develop a change management strategy which will involve stakeholders for the above change

A stakeholder analysis can be conducted to identify how the stakeholders of the project should be managed.

Identify stakeholders –

The stakeholders of the change process at Hayleys Advantis Limited for switching to new ERP system solution will include,

1.      Employees

2.      Supervisors

3.      Middle managers

4.      IT officers of the company

Stakeholder	Responsibilities	Strategy	Strategy explanation
Employees	Adapting according to the new systems, being the primary impacting group of the change process at Hayleys Advantis Limited.	Manage closely	The employees of the Hayleys Advantis Limited will be provided inductions, presentations, meeting, group training sessions and also practical training sessions to adapt to the new systems
Supervisors	Providing supervision for the change activities and making sure that the short term targets are achieved	Keep informed	The supervisors will be provided information about the project schedules, important targets and special deadlines to be met
Trainers	Trainers will train the employees for the new ERP systems and will make sure that employees are able to handle the systems independently	Keep satisfied	The trainers will be given instructions on what should be done and how the training programmes need to be organised.
IT officers	Setting up the new ERP systems and being responsible for procurement of the hardware items those will be needed for the project.	Monitor	Instructions will be given for the IT officers of the Hayleys Advantis Limited organisation how the purchases should be made and what are the new ERP systems that will need to be set up in different departments of the organisation.

Develop systems to involve stakeholders

Meetings – meetings will be one of the main methods the management of Hayleys Advantis Limited will need to use as a strategy to get the stakeholders of the business involved for the change management approach. Meeting will include gathering the employees of the Hayleys Advantis Limited and the management of the organisation to share the idea, thoughts and views about the change that is about to be carried out in the organisation. at first the management can provide information on what are the changes that will be made and their impact (Weisbord¸ 2004). And then the employees have the freedom to express their thoughts on the discussed items.

Group facilitation – having employees in group facilitation in the organisation will be another method that can be used to involve the stakeholders for the change management process. With group facilitation, the employees will be allowed to gather as teams and present the problems they will be facing as a result of the change process. This will allow the employees to receive solutions and clarify the issues related to change that is about to take place.

Delegation – delegation of authority is another effective and result oriented method of involving the stakeholders of the Hayleys Advantis Limited. When the stakeholders of the change process such as employees, supervisors, managers, trainers and stakeholders outside the organisation are given authority for tasks and processes of the change process, they will be holding more responsibilities and the stakeholders will be in charge of the changes. This will make the stakeholders learn more about the change process at Hayleys Advantis Limited and take actions on behalf of the organisation (Rothwell, 2005). Therefore using delegation of authority can be seen as an effective method that will get the stakeholders involved in the change process in a better way.

5. Create a strategy for managing resistance to change

Following strategies will be carried out in the Hayleys Advantis Limited organisation for managing the employee resistance for the change management process at the organisation.

Objective – reducing and minimising the resistance for changing over to the new ERP system at Hayleys Advantis Limited.

Time frame – within the system transition period (1 month)

Training and education – providing training and providing education for the employees of the organisation is one of the most effective actions that can be taken to reduce resistance. With the educational programmes and training programmes, the employees of the Hayleys Advantis Limited organisation will be able to get a better understanding of the change that is about to take place and how the employees of the organisation will be affected from the change. With trainings and education programmes, the employees will be more confident about the new working systems they have to work with and continue the operations (Anderson, 2009).

Taking feedback from the stakeholders – taking feedback from the stakeholders and making changes for the change process and activities related to the transition process will be another method that will help to reduce the resistance of the employees. With that, the employees will be able to express the difficulties they have face in the process and get help from the organisation to reduce the difficulties they face. Taking feedback from the employees will help to mitigate the difficulties and build confidence among the employees which will then help to reduce the resistance for change in the organisation (Smith, 2002).

6. Develop appropriate models for change, plan to implement a model for change and develop appropriate measures to monitor progress

Change model

This part of will focus on applying the selected model of change for the Hayleys Advantis Limited organisation, preparing the environment for implementing the change process and then the methods on how to assess the progress of the change process.

The strategic change model that has been selected to use is the ADKAR change management model. The ADKAR model will be included with steps as Awareness, Desire, Knowledge, Ability and Reinforcement.

Awareness

In the awareness stage, the change that has been proposed to take place in Hayleys Advantis Limited will be communicated with the middle management, the supervisors and with the employees of the organisation. this will focus on making the employees understand why a change to the ERP system is needed at this time and what benefits they will receive.

Desire

In this part, it is expected to create desire within the employees of Hayleys Advantis Limited and other involved parties for the change. It will include showing the benefits of the changed systems for the employees themselves and how they are able to make their work easier.

Knowledge

This part focuses on providing theoretical knowledge to the employees on how to use the new ERP systems and how they are able to process information and keep the operations up to the required level. Knowledge will be provided to the employees using formal training programmes, coaching, and group discussion and troubleshooting guidance from internal and external parties of the organisation.

Ability

In knowledge, the theoretical knowledge was provided for the employees. Since theoretical knowledge is not sufficient for them to work independently with the new systems. Therefore practical training and hands on experience with the systems is given to the employees using direct involvement of the coaches, monitoring the performance, using expert trainers, and practising the operational activities suing the systems.

Reinforcement

Reinforcement of the changes will be focusing on developing the performance of the employees with the system that was implemented and making sure that the employees are satisfied with the new system and also that they are comfortable with the system.

Implementation model

As the change that has been proposed for the organisation is an internal change that does not require interactions with the outside of the organisation, customers or the suppliers, the change can be implemented using the business process reengineering (BPR) approach. The implementation of the BRP will be done in six main steps. Those are,

1.      Stating the case for action

2.      Identifying the process thoroughly for reengineering (switching to the new ERP system)

3.      Evaluating the factors that support the process

4.      Understanding the current process

5.      New process design

6.      Implementation of the process

Methods of monitoring progress

Goal based evaluation –

Goals related to efficiency of work can be given for the employees in order to compare the performance of the employees with the old systems and with the new system (Smith, 2002). This will allow the management to identify how the performance of the employees has been developed or upgraded after the implementation of new ERP systems.

Employee feedback –

Taking feedback from the employees on how they have found the new ERP system to be helping them for their work. Getting feedback from the employees will be important as employees are the main group which faced the changes and therefore their feedback will provide more relevant feedback for the management to make changes to the systems and also to identify which areas of the system has not supported the employees to maximise their work and performance.

Quality circles –

Quality circles are another approach that can be taken to discuss the progress of the new system within the organisation. The quality circles can be organised with the participation of employees, supervisors and the middle management. In the quality circles, the employees will be allowed to bring up the issues they have been facing with the new system (Smith, 2002). This will be helpful for the organisation to identify how the new system has been performing and what areas are still needed to be developed.

Conclusion

Three models of change that can be used to manage the change the Hayleys Advantis Limited organisation were discussed and the differences between the different models of strategic change were identified. After comparing the models of change, the most suitable method of change was identified as the ADKAR model of change for Hayleys Advantis Limited. The importance of making the changes in Hayleys Advantis Limited that includes switching over to the new ERP systems was discussed and resources implications that the organisation has to face have also been identified. The benefits that can be derived by using strategic intervention in the Hayleys Advantis Limited organisation have also been discussed. A strategy has been created to reduce the resistance for change in the Hayleys Advantis Limited organisation and models of change have been formed for implementing the change and measuring progress.

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